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Distribution Analysis Of 2006 Subprime Rate Loans
The White frequency (percent) of subprime rate loans was
21.78% with a magnitude (average spread) of 5.09%. Using
the White frequency and magnitude of subprime rate loans
as a benchmark, Blacks had the highest difference among all
minorities with a 52.76% frequency and an average spread
of 5.50%. Blacks, therefore, received higher cost subprime
rate loans 2.42 times the frequency in which Whites received
such loans. The difference between the White and Black
average spread was 41 basis points.
Hispanics had the second highest disparity in the frequency
and magnitude of subprime rate loans compared to Whites.
Hispanics had a subprime rate loan frequency of 40.91% or
1.88 times the 21.78% frequency for Whites. The Hispanic
average spread was 5.18% or 9 basis points higher than
Whites.
Asians were the only minority group whose frequency and
magnitude of receiving higher cost subprime rate loans was
less than Whites. Asians received higher cost loans 17.43%
of the time or 20% less often than Whites. Asians had an
average spread of 4.95% or 14 basis points lower than the
White average spread. Native Americans and Hawaiians
received higher cost loans 33.82% and 31.46% of the time,
with an average spread of 5.21% and 5.18%, respectively.
despite the racial disparities in the frequency and magnitude
of 2006 subprime rate loans, Whites had more loans overall
and more subprime rate loans than all minorities combined.
This is expected since Whites comprise a large majority of
the U.S. population. Whites had 70.80% of the loans and
56.23% of the loans with a spread as shown in Table 3
below:
TABLE 3: PERCENT OF LOANS BY RACE AND PERCENT OF LOANS WITH A SPREAD BY RACE
The large number of White subprime rate loans suggests
that the problem with increased defaults and foreclosures is
not likely to be isolated to minority communities. many White
Americans will be adversely affected as well.
Page 13 of 27 The Demographic Impact of the
Subprime Mortgage Meltdown